Officials at odds as electric territory battle heads to House

GREENFIELD — It’s round two in the debate over who can provide electricity to the area, and some of the county’s top elected officials remain on opposite sides of the issue.

A bill that takes away the city’s ability to take territory from private and rural companies during annexations has passed the state Senate and now heads to the House for consideration.

That’s one point for NineStar Connect and zero for Greenfield Power and Light. While the measure that would prohibit cities from acquiring electric territory from private companies and rural providers would affect all 72 municipally owned utilities across the state, officials at Hancock County’s two electric companies are particularly interested in it.

With local ties — the measure was written by Sen. Mike Crider, R-Greenfield — representatives from both the city and NineStar Connect have testified in the Statehouse and plan to do whatever it takes to make sure their voices are still heard in the coming months.

Current state law allows cities to gain new electric territory during annexations by petitioning the Indiana Utility Regulatory Commission. The city must pay the private company or co-op a fee based on what customers currently pay for electricity, plus a percent on future growth for the following five years.

Senate Bill 309 would take that ability away, which NineStar Connect executives said is only fair. But city officials said it will take away their advantage to lure economic development into the city with low rates, and it wouldn’t be fair to new city residents who would end up paying higher rates to NineStar Connect.

“I don’t think that’s good public policy,” said Mike Fruth, director of Greenfield Utilities. “To me, that just doesn’t make sense.”

Fruth and Mayor Chuck Fewell spoke against the measure in a Senate committee earlier this month, while NineStar CEO Mike Burrow spoke in favor of the bill. NineStar also has some heavy political players on its side. In addition to Crider, former Sen. Beverly Gard is helping with the project, and Rep. Bob Cherry, R-Greenfield, signed on as a House sponsor.

It’s a matter of fairness, Burrow said, and current Indiana law has a “quirk” that gives an unfair advantage to cities.

“Imagine a prized possession you have,” Burrow said. “Do you think it’s fair you cannot say no if a government entity wants to take it?”

Burrow said that since 1983, NineStar lost 4,200 meters because of annexations, with the city taking over its electric territory. The co-op would be 30 percent larger than it is today, he said, if the current law weren’t in place.

But Fruth argues the city has annexed only 99 homes in the past 20 years. While Burrow points out numbers of missed opportunity for NineStar Connect, Fruth said that’s not a fair assessment because new development of homes and businesses might not have happened if the city had not annexed and provided utilities.

Fruth said the city can offer electric rates 40 to 50 percent lower than what NineStar can provide. While Burrow does not disagree, he said NineStar’s rates are higher because it does not have the density the city has. NineStar covers 243 square miles compared to Greenfield’s 13, and more miles of infrastructure means more cost to the electric provider that has to be passed on.

When an area is just a field with two farmhouses, Burrow said, the city does not want to serve it. But the moment economic development and growth can happen — a new neighborhood of homes might be built — the city wants to annex the area and take away the territory from the rural electric provider.

“All the (rural electric providers) are just warming the seat, waiting for development,” Burrow said. “And once development happens, we’ve got to turn it over.”

The bill passed the Senate 42-7 last week and next will go through the same legislative approval process in the House. An amendment to the bill that would have allowed the majority of residents in an annexed area to decide who should provide their electricity failed.

Fruth said he’s disappointed the amendment failed because surely residents of a newly annexed area would have chosen Greenfield with its lower rates. It’s good public policy for the customer, he said, to allow the customer to pay less per month.

Fruth said he’s not sure whether he’ll testify again in the House, but he hopes for some kind of change or amendment before the bill becomes law.

“(Sen. Crider) has been receptive to listen, but … I’m not sure that he understands our position,” Fruth said.

Crider, who has met with both sides, said he will continue to work to build consensus on the bill. Rep. Erich Koch, R-Bedford, is a sponsor and is also chairman of the utilities committee in the House, Crider said, so surely it will get a hearing.

“I think it’ll get passed; I’m not sure whether it will get amended or not,” Crider said. “That’s something that’s always a possibility. But I’ve been having ongoing discussion with the two parties, and I expect that to continue.”